President Muizzu Ratifies Fiscal Responsibility Amendment, Delays Key Rules

President Dr. Mohamed Muizzu has officially ratified the First Amendment to the Fiscal Responsibility Act, introducing a new Fiscal Responsibility Charter while temporarily suspending the enforcement of certain financial safeguards. The amendment, passed by Parliament on December 1, 2025, mandates that a Fiscal Responsibility Charter must be formulated, approved, and published in the Government Gazette within 24 months of the Act coming into force. This charter is intended to establish a comprehensive framework for managing public finances. Crucially, the amendment includes a two-year grace period during which implementation of measures arising from the charter will not be mandatory. Additionally, the requirement to conduct feasibility studies before including Public Sector Investment Programme (PSIP) projects in the State Budget is temporarily suspended. This temporary suspension of feasibility study requirements for major infrastructure and development projects could streamline budget processes but has raised questions about fiscal oversight mechanisms. The PSIP encompasses significant government investments across sectors including tourism, transportation, and public infrastructure throughout the Maldives' atolls. With the President's ratification and publication in the Government Gazette, the amendment is now in effect. The development comes as the government balances ambitious development agendas with the need for fiscal discipline in an economy heavily dependent on tourism revenues and vulnerable to external shocks. The Fiscal Responsibility Act forms a cornerstone of the Maldives' public financial management framework, aiming to ensure sustainable debt levels and responsible spending. The introduction of a charter represents an evolution in this framework, though the delayed implementation timeline provides flexibility during the initial phase.